INTRODUCTION
The business entity must obtain an Import & Export Code before importing into or exporting from India. The Import & Export Code, or IEC number. The Directorate General of Foreign Trade (DGFT) issues the ten-digit Import & Export Code.
A business that engages in import and export must possess an IEC registration certificate. Therefore, an importer must confirm that the importing entity has a GST registration and an IEC code before importing any products into the territory of India as both are necessary for customs clearance.
The Director General of Foreign Trade (DGFT) issues the Import Export Code (IEC), which is a 10-character alpha-numeric number. Every person involved in the import/export business in the country have to obtain an IEC. Without an Import Export Code, an importer merchant cannot import goods, and an exporter merchant cannot benefit from the DGFT’s export scheme.
IEC can be obtained by a sole proprietorship, a partnership, a limited liability company, a trust, a HUF, or a society. Following the implementation of GST, the IEC issued is the same as the firm’s PAN. The IEC will still be issued separately by DGFT based on an application. The Provisions regarding the IEC are contained under:
- The Foreign Trade (Development and Regulation) Act, 1992,
- Foreign Trade (Regulation) Rules, 1992, and
- Foreign Trade Policy.
As per Section 7 of Foreign Trade (Development and Regulation) Act, 1992: No person can import or export without IEC. But in case of services and technology, IEC shall be mandatory only when; the importer-exporter is taking advantage under Foreign Trade Policy or dealing with specified services or technologies.
PROCEDURE FOR IEC REGISTRATION
- An application is to be prepared in the specified format (Aayaat Niryaat Form ANF-2A) and to be filed with respective Regional office of DGFT through online portal (https://www.dgft.gov.in/CP/)
- Submission of the following documents in digital format – GIF, JPEG, size not exceeding 5 MB:
- Copy of PAN card of Individual or Firm or Company
- Cancelled Cheque bearing entity’s preprinted name
- Individual’s voter id or Aadhar card or passport copy
- Address proof of applicant entity
- Passport Size photographs of Applicant
- Documents to be uploaded after the completion of application, one needs to file with respective Regional office of DGFT via DSC (Digital Signature Certificate) and pay the required fee for the IEC Registration
- DSC of Class II or III only issued by Controller of Certifying Authorities (CCA) approved certifying agencies in India
- When the application is approved, the government sends a soft copy of the IEC Code
- Registration fee is of 500 rupees
- There shall be one PAN- One IEC.
MODIFICATION IN REGISTERED IEC
- An application for modification may be made for change in details like name, address, constitution, ownership in Proprietorship firms, change in nature of the firm
- When IEC holder seeks any modifications, request can be done online only.
EXEMPTED CATEGORY
IEC is compulsory for import and /or exports. All GST-registered traders are not required to have an IEC. In all of these cases, the trader’s PAN will be interpreted as a new IEC code for import and export purposes. However, the following categories of importers or exporters are exempted from obtaining IEC
- Ministries /Departments of Central or State Government
- Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture
- Persons importing/exporting goods from/to Nepal; Bhutan; Myanmar (through Indo-Myanmar border areas); and China (through Gunji, Namgaya Shipkila and Nathula ports), the CIF value of single consignment of import/export of goods from/to Nepal; Bhutan and Myanmar (through Indo- Myanmar border areas) does not exceed Indian Rs. 25,000/-; and in the case of China:
- For import/export of goods through Gunji and Namgaya Shipkila, CIF value of single consignment does not exceed Indian Rs.1,00,000/-
- For import/export of goods through Nathula, CIF value of single consignment does not exceed Rs.2,00,000/-.
ADVANTAGES OF IEC REGISTRATION
- Global Approach
IEC helps in taking services or products to a global market for the expansion of business - No Further Compliance
The IEC does not require any number of compliance such as return filing. There is no requirement to follow any sort of processes to maintain its validity once it has been assigned. There is no requirement to file any returns with the DGFT for export transactions - Individuals can have IEC
Even individuals or sole proprietors can obtain IEC code without incorporating a business entity - Reduces the Risk of Illegal Imports or Exports
IEC helps to eliminate the illegal transportation or illegal exports and imports between the countries. The registration helps the officials to oversee and better administer the transactions undertaken as a part of cross border business - Other Advantages
On the basis of IEC registration, the companies could receive a variety of benefits from the DGFT, the Export Promotion Council, Customs, and others for their imports and exports.
OTHER PROVISIONS
- IEC holder have to confirm online in case the IEC details have not changed because if an IEC is not updated within the timeframe specified, Govt. is set to start deactivation of such IEC
- On successful Updations, an IEC that has been de-activated may be activated. This, however, would be without prejudice to any other action taken in the event of a violation of the FTP’s other provisions
- It’s possible that an IEC will be flagged for further investigation. Any risks flagged by the system must be addressed promptly by the IEC holder(s), or the IEC will be deactivated.
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.
